Great question. It was a lot of work finding, buying, renovating and leasing all the properties. We want to ‘realize’ all of our projected or unrealized equity capture, so exit strategy is to wait till it’s more of a seller’s market before selling.

In the meantime we get to enjoy the cashflow, possible appreciation, principle paydown, and depreciation. And yes, there is some maintenance work, especially with turnover, but it’s subcontracted out, and tenants cover most of those costs.

All that said, I do have an interest in multifamily and am thinking of ways to do it without having to sacrific current cashflow.

I must say Robert has done a good job of being innovative, finding a solution to whatever has come up. Robert also picked up the phone every step of the way asking questions to anyone and everyone that was successful in real estate. He never thought he knew it all. He is a solution maker!

Good job Robert I am so happy for you and Lisa.. So how is it working together now?

Natalie,
Thanks. You’re right, putting my ego aside and asking for help is the way to go. And it is so much more time and cost effective than reinventing the wheel all the time. I still talk with Jeff at least a couple of times a month, as well as others. It’s good business to stay in the loop.

Working with Lisa has had it’s challenges and we’ve worked out some things… it’s very good now.

Great work Robert. With the money market the way it is I’m doing, what I think, is my last conventional loan. They take too long to process and the rules keep changing. I’m looking into the hard money lenders with a new offer today. Any insight on pitfalls or hidden costs?

One thing you didn’t mention that I always look for is that brick siding. Not sure how many of those you have but it’s the only way to go. Also, that was some good looking tile in the bath room, was that vinyl or ceramic?

Jason,
Great question. Theorical. One partnership, as you know, has been hit hard with some turnover/vacancies and some repair costs that were things missed in the original rehab, because of the speed and volume at the time.

Three partnerships are cashflowing, but all cash flow is being channeled into accounts to build contingencies and savings for year end taxes. We ended up using already built up funds towards actual rehab costs because refinances shifted dramatically near the end of 2009, so lots of capital was used to close refinances.

Right now, we realize about 6-8k cashflow. In January we should be up to 10k because the accounts will be caught up.

Robert, OUT STANDING!! Like Rui said, you are turly a inspriation. I,m new at this and will be attending my first simmanare with a future partner. I will always keep you in my mind,and tell my self that if you can do it!so can I!! i,ve declared it, and now i will make it so!! Keep it up!!

Andy,
Sorry, I don’t have the rate info on the final loan readily available. I believe it was one of our fannie mae 10, and that it was around 6.3%.

We’ve used quite a few lenders for various loans. And the products each lender has constantly changes, because the financial market constantly changes. So, I recommend using investor friendly brokers/lenders and staying in touch with what each has. That’s where staying in the loop is useful.

That being said…For hard money, I recommend Red Door Funding. They also have some refy products as well. We’re working with Blake at Capital Concepts on a few refys as well.

The “all in” numbers are 88k for the property on the video.

Randy,
Brick is nice .. I agree, my market was brick dominant, but I didn’t mind other sidings if the numbers were right.

With hard money there are going to be some costs, but the way I look at it, it is “Cost of doing business”. They provide a valuable service.

On the bath flooring you saw, that was vinyl that went very well with the carpet. Typically, we put in tile, unless the bath is upstairs.

Gentlemen,
No short answer to your questions. Generally, you set up an LLC and this serves as the governing document to cover all the ‘what ifs’ and it lays out the nature, expectations and percentages as well.

Then a lot of the rest depends on many variables including the lead partner’s credit and ability to sign on a loan, bank/mortgage guidelines, and a few other things. Bottom line is you need to structure it so that you can close the deals on the front end and back end (refy).

Keith,
3 was the average. Some months we did 6-8 and some 0 or 1. Looking back.. it was a pretty frenetic pace. The adrenalin probably kept me going, also exercising and that I did this full time helped too.

The confusion lies in the calculation of ROI. The $27k return does not include the initial investment. The $15k initial investment is part of the $88k “All In”, meaning that the loan was for around $73k, allowing for $15k out of pocket.

That means that the $27k equity capture is above and beyond the original $15k investment. So.. at the end of the day, the deal will return the original $15k, PLUS $27k in profit.

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